Venezuela yesterday raised the specter of a cut in oil production by the OPEC cartel, swinging behind a similar call from Iran but putting itself at odds with the majority of other members in the organization.
Fears of a reduction in the cartel's production ceiling pushed oil prices higher in Asian trade, with the market also focused on a week of crunch diplomatic negotiations in Europe over Iran's nuclear ambitions.
The 11 OPEC members are to meet in Vienna today and are expected to leave their production ceiling at 28 million barrels per day because of current high oil prices, which have been fueled by political tensions in Iran and Nigeria.
But Venezuelan Energy Minister Rafael Ramirez said yesterday that OPEC should be ready to cut production by 1 million barrels per day, possibly as early as today.
"We believe that OPEC has to be ready to cut [production,] maybe now at this meeting, maybe at the next meeting," the minister told reporters as he arrived at a hotel in Vienna ahead of today's meeting.
In contrast, Saudi Arabia, the world's biggest producer of crude, Kuwait, Algeria, Nigeria, Indonesia and Iraq have called for the production ceiling to be maintained for now, citing elevated oil prices.
Ramirez blamed the high price of oil on mounting tensions between the US, EU and Iran over Tehran's nuclear program.
"We believe that if the United States insists on putting pressure on Iran, the price will be maintained at the level we are seeing," he said.
The nuclear question was to be the focus of a meeting in London yesterday between the foreign ministers of the UK, US, Russia, China and France -- all permanent members of the UN Security Council.
Washington and the Europeans are expected to try to convince Moscow and Beijing to support sending Tehran to the Security Council at a gathering in Vienna of the UN's nuclear watchdog on Thursday.
Iran also favors reducing output by 1 million barrels per day.
Analysts said this call may be linked to a desire by Tehran to use its energy weapon against the West amid the nuclear standoff.
Iranian Oil Minister Kazem Vaziri-Hamaneh was tight-lipped about his country's view on oil production as he arrived at a hotel in Vienna yesterday.
"We will look at the conditions of the market and we will decide collectively," Vaziri-Hamaneh told reporters.
Oil prices rose sharply above US$68 a barrel in Asian trading, stirred ay Iran's call for a cut in OPEC production levels, dealers said. At 4:05am GMT, New York's main contract, light sweet crude for March delivery, was up US$0.43 to US$68.19 a barrel.
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